Formula 1 and sponsorship goes hand in hand but, with F1 and the commercial sector changing constantly, so does the relationship between the two.
Formula 1 has had sponsorship in its DNA since it started in 1950, utilising vehicle livery design to promote big brands. The sponsorship back when the sport started was small and was mainly a car manufactures sport. 65 years later, Formula 1 is returning to this era of manufactures making up most of the grid with sole backed teams struggling to survive in the modern economic environment.
Sponsorship of F1 teams is one of the main ways F1 teams, especially smaller teams, raise the finance for them to be able to go racing. As Formula 1, is the biggest motorsport in the world and 1 of the most popular sports and entertainment worldwide? That is why many worldwide organisations find this as, a good way to advertise their company through the sport or a team or driver.
The sponsorships of teams is rising slower than F1 teams costs. This is definitely affecting the smaller teams who have not been able to proceed up the standings with independent teams, failing further down the standings with Martini Williams Racing being the only exception possibly, through their big motorsport sponsorship deal other teams do not have. The only other teams in 2014 with a sponsorship name deal (where the name of the sponsor appears in the team’s name) is Red Bull Infiniti Racing and Sahara Force India.
The main sponsors for F1 teams come from the drivers themselves and bring the sponsors with them through the junior feeder series and from their home nation. These drivers are referred to as, pay drivers and include the likes of Pastor Maldonado, Sergio Perez and Marcus Ericsson. The subject of pay drivers, is a controversial topic but, this is one of the main ways teams find new sponsorship and funding opportunities.
Pay drivers are, often referred to being poor F1 drivers because, they have got into F1 potentially, through their sponsorship backing. A good example is Felipe Nasr who, will race in the 2015 season for the Sauber team. The reason why he is driving for Sauber over drivers who, are potentially better than him (e.g. Jolyon Palmer who beat him to the GP2 championship) is, his financial backing from Banco de Brazil.
The reason why pay drivers are appearing more, is the fact teams from up and down the grid are struggling with their finances through the 2014 season with the new power units. The power units’ high price tag has put a lot of pressure on teams especially at the bottom of the grid with both Caterham and Marussia struggling to make the end of the 2014 season with them both unlikely to return to F1 this season. The high cost of the power units is seen as, the overall problem with the bottom teams struggling to survive and therefore need more sponsorship to survive and for the future.
When I started to watch F1 at the end of 1990s into the 21st Century, sponsors included major financial institutions (MasterCard and HSBC) major car manufactures from across the globe (Toyota and Honda). These were the biggest companies of this era in business before the technology giants of the modern age. This may be the issue with teams trying to get big sponsorships in recent years is large technology companies do not see this as good advertising for their brand. Bigger sponsorship deals are becoming rarer and that may be due to the 2008 credit crunch.
The Global recession had a big impact on large companies and on F1 in general. As economic conditions are starting to improve, more sponsors are getting involved with F1 and we hope to see the changes in the industry make for improved offerings from teams and sponsors. Times are changing and there are new players on the scene to aid the industry and help old thinkers embrace new technology and internet based co-operation.